Queensland Economic Advocacy Solutions

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Where are the fastest growing areas of Queensland

The Australian Bureau of Statistics has released fascinating statistics relating to the hows and whys of population growth across Australia and Queensland.

Brisbane is back among Australia's fastest-growing cities, according to latest data.  Brisbane's population grew by 48,000 people in 2016-17 to reach 2.4 million - a 2 per cent increase since June 2016 - equal to Sydney and second only to Melbourne (2.7 per cent).  This was the fastest growth rate recorded for Brisbane since 2012-13.

The latest population estimates were the first to include data on the components driving population change in Australia's capital cities and regions – natural increase (births minus deaths), internal and overseas migration.  It is now possible to not only see how much population is changing in an area, but to understand why this change is occurring. In Brisbane, the contribution of each component to population growth was relatively even. Net overseas migration accounted for 38 per cent of population change in 2016-17, compared with 37 per cent from natural increase and 25 per cent from net internal migration.

Key findings for Australian States and Capital Cities include:

  • All states and territories experienced population growth between 2016 and 2017. Victoria had the largest growth in terms of absolute numbers (144,400 people), followed by New South Wales (121,800) and Queensland (79,600). The Northern Territory had the smallest growth (370).
  • Victoria also grew fastest (that is, it had the strongest growth rate), increasing by 2.3%, followed by the Australian Capital Territory (1.7%), New South Wales and Queensland (both 1.6%). The Northern Territory had the slowest growth (0.1%), followed by South Australia and Tasmania (both 0.6%), and Western Australia (0.8%).
  • Melbourne had the largest growth of all Greater Capital Cities (125,400), followed by Sydney (101,600) and Brisbane (48,000). This was the first time on record that Sydney had a population increase above 100,000 people. Together, these three cities accounted for over 70% of Australia's population growth in 2016-17.
  • Melbourne also had the fastest growth (2.7%), ahead of Brisbane and Sydney (both 2.0%).

The fastest and largest-growing area in Queensland in 2016-17 was Pimpama on the Gold Coast, which grew by 3,000 people (31 per cent). Net internal migration was the main driver of this growth, accounting for almost 90 per cent of population change in 2016-17. Other areas to experience large growth included Jimboomba on the southern outskirts of Brisbane, and North Lakes - Mango Hill in the Moreton Bay region, north of the city (both increasing by 2,100 people). Large growth also occurred in Coomera on the Gold Coast and Springfield Lakes, a suburb of Ipswich (both having a population increase of 1,400 people).

More specifically for Queensland:

  • Five of the ten SA2s with the largest population increases (in terms of absolute numbers) were located outside of Greater Brisbane, with three located on the Gold Coast.
  • The SA2 with the largest population increase in Queensland was Pimpama (3,000 people) on the Gold Coast, followed by Jimboomba on the southern outskirts of Greater Brisbane, and North Lakes - Mango Hill in the Moreton Bay region, north of Brisbane (both 2,100). Large growth also occurred in Coomera on the Gold Coast and Springfield Lakes, a suburb of Ipswich (both 1,400).
  • Pimpama was also the fastest-growing SA2 in Queensland (31%). This was followed by Ripley (15%), a suburb of Ipswich, and Newstead - Bowen Hills (10%), in inner Brisbane.

Population density varies greatly across Australia. Australia's population density at June 2017 was 3.2 people per square kilometre (sq km). Among the states and territories, the Australian Capital Territory had the highest population density, at 174 people per sq km, followed by Victoria (28), New South Wales (10), and Tasmania (7.7). The remaining states and territories all had population densities below the Australian figure, with the Northern Territory having the lowest at just 0.2 people per sq km. 

The most densely-populated SA2 in Australia in 2017 was inner-city Melbourne (19,500 people per sq km). The neighbouring SA2 of Carlton (12,100) also featured in Australia's top ten. In Brisbane, Kangaroo Point (6,800 people per sq km) and nearby New Farm (6,500) had the highest population densities.

At the other end of the scale, 205 SA2s in Australia had population densities of less than 1 person per sq km, the majority of which were in Queensland (46 SA2s), Western Australia (41) and New South Wales (37). The Northern Territory had the highest proportion of SA2s with less than 1 person per sq km, at 26%, followed by Western Australia (16%).

All statistics sourced from ABS Catalogue 3218.0

Queensland's Domestic Economy - June Quarter 2018 Update

The best measure of the economic activity that each of us sees and feels on a daily basis is state final demand which measures domestic economic activity. Today the Australian Bureau of Statistics released their latest estimates and Queensland's year to the June Quarter 2018 was a very healthy 3.4% on a seasonally adjusted basis - line ball with the National average (3.4%).

However the June quarter 2018 itself for Queensland was somewhat of a shocker with it only growing by 0.1% seasonally adjusted (the lowest of all states). This was as a result of a shutdown in Government consumption and capital spending during the quarter. We will need to keep an eye on this as the correlation between employment growth and SFD growth is quite strong and it indicates that job creation in the immediate months ahead may be softer than what we have seen.

Finally the elephant in the room that has to be addressed is that our economy continues to be out of alignment at present. Queensland is quite simple not investing enough with our current capital spend as a percentage of the economy at 24.4% vs our long term 25 year ave of 26.9%. Quite simply we are drawing down on our wealth & stealing from future generations. Queenslanders would have to go back to nearly last century to see us at this extent of underspend.


Pollies not doing us any favours

This is from the Courier Mail and saved me the words ……..

Each workplace accident statistic represents a life changed forever

Amid the chaos and circus of last week’s Liberal leadership spill in Canberra, Safe Work Australia released its ‘Key Work Health and Safety Statistics Australia 2018’.

These statistics detail national work-related injuries, diseases and fatalities and offer a timely reminder of the importance of workplace health and safety. QEAS supports a workplace health and safety culture in Queensland workplaces where every person in the workplace has a safe place of work. Government, employers and employees all have a collective responsibility to ensure that workplaces are healthy and safe.

Looking at the trends and industry breakdowns is sobering, and every number in the publication represents a life changed forever.  Whilst there is a 47 per cent decrease in the national workplace fatality rate since 2007, there were still 191 workplace fatalities in 2016-17 and every worker fatality is one too many.

An individual life is precious and in reality no monetary value can be placed on the life of an identifiable individual. Nonetheless, economists have estimated the value of a statistical life, based on the lost economic value of an average individual who dies prematurely. The Australian Government suggests the current estimate of a statistical life in Australia is $4.5 million and the value of a statistical life year is around $195,000. Similarly non-fatal injuries also have an economic value attached to them. 

The cost of annual work related injuries and diseases in Australia is estimated at a shocking $61.8 billion or approximately 4.1 per cent of GDP. Similarly the cost of work related injuries and diseases in Queensland is approximately $14.6 billion or 4.5 per cent of our GSP.

Understanding the work-related injury, disease and fatality statistics can help reduce work-related fatalities, injury, illness and disease.  They are well worth taking a look at. 

Lower Company Tax - What’s in it for me

This week a cut in company tax for businesses with a turnover greater than $50 million will be given one last opportunity to be passed by the Australian Parliament when it is due for debate in the Senate. It is widely anticipated that the Bill will again be rejected spelling the death-nell for the initiative.

One would have initially thought the case for this initiative was relatively sound and straight forward. Treasury and KPMG modelling clearly demonstrated that the original “Enterprise Tax Plan’ would have a significant positive impact on the Australian economy. The results of the long-term impact of lowering the company tax rate to 25 per cent would:

  • Boost GDP by up to 1.2 per cent;
  • Lift wages by up to 1.4 per cent;
  • Lift household consumption by up to 1 per cent; and
  • Increase employment levels by up to 0.4 per cent.

The argument that tax savings are used to create jobs and lift wages as well as the need for an internationally competitive tax rate to ward off any negative impacts on Australian industry have considerable merit.  However, the problem as I see it, is that those with the responsibility to lobby for this change and the Coalition have failed to raise awareness and educate the broader community on what’s in it personally for Australians.

In short, a what’s in it for me (WIIFM) campaign would have clearly demonstrated the jobs created and wage increases possible from a lower company tax for businesses of all sizes. The chief proponent for the reduction in the company tax rate, the Business Council of Australia who predominantly looks after the big end of town, has largely ignored the WIIFM approach and instead founded its campaign on why it is good for business.

This relies on an inference (and I might add a correct one) that what is good for business is good for their employees and potential employees. However, it would appear that an inference has not been enough and it has failed to have any cut through to everyday Australians.

Arguments of tax savings creating jobs have been dismissed by three words ….. 'trickle down economics'. Unfortunately Australians are skeptical that companies will follow through on their promise to create jobs. And the erosion of industry competitiveness will play out in the longer term which is difficult to motivate people when so many Australians have not seen or felt the prosperity of 27 years of uninterrupted growth.

As an example of lack of cut through, recent work by the Committee for Economic Development of Australia (CEDA) indicated that when asked what were the most important actions for the nation, Australians incredulously listed lower company tax in the bottom two issues of importance.  Quite simply company tax is not even on their radar.

The short lesson to this debate is that unless lobbyists and policy makers convince the average Australian on why a particular initiative is personally good for them then it will almost certainly fail.  We are in an era of populism as opposed to strategic policy for the longer term. What should be highlighted in plain and easily understandable terms, Queensland's average wage would rise by $826 each year and 9,600 unemployed Queenslanders would have a job if we were to cut the company tax rate for companies of all sizes.

Gains of the past three years have bypassed many unemployed Queenslanders

The Australian Bureau of Statistics labour market numbers for July 2018 reveal solid employment growth on one hand but gains having bypassing our State's unemployed on the other.

Queensland's stubborn unemployment rate has been unable to consistently break through the six per cent barrier and contrasts with a national unemployment rate that is steadily tracking towards what would be considered close to full employment.

Over the past 12 months the national unemployment rate has decreased from 5.6 per cent to 5.4 per cent where as the Sunshine State's unemployment rate has remained steady at 6.1 per cent.  If we compare over a 36 month period the separation between Queensland's unemployment rate and the national rate is even more apparent.  Three years ago the national rate was 6.1 per cent the same as Queensland's, now its 0.7 per cent lower where as our rate is pretty much unchanged.  

Quite simply we are not making the gains in reducing our unemployment rate that is being experienced in other States.  

The challenge for Queensland is that employment growth is occurring but it is also starting to ease.  QLD's 12 month growth to July 2018 was 2.2% and has now slipped below the 20 year long term trend and compares to New South Wales (3.2 per cent) and Victoria's 2.5 per cent.

At the same time there is a steady reentry into the workforce as Queenslanders register as unemployed and we have southerners moving here and either soaking up some of the newly minted jobs or also registering as unemployed. 

Much emphasis has been placed on employment growth but we need to also focus on whether our unemployed are benefiting from the economic growth that has occurred.  It would appear much of the employment and economic gains of the past three years have bypassed many unemployed Queenslanders.

All figures sourced from ABS Catalogue 6202.0

Overseas Migrants to Queensland: Where the bloody hell are you?

As Australia’s population clock ticked over 25 million at 11 pm on the 7th August 2018 it is important to understand how this milestone has been achieved. In short Australia continues to be the lucky country and the heavy lifting of our increase comes from overseas migrants wanting to get a piece of the action despite recent integrity measures by the Federal Government to make it more difficult for Australian businesses to access skilled migrants.

However in analysing the data I noticed an interesting aberration for Queensland. 376,650 Australians in 2016-17 elected to pick up their belongings and relocate to another State.  This is referred to as interstate migration. Of this amount Queensland attracted 26.1 per cent or 98,410 persons from other States, well ahead of a per capita share (which for Queensland would be 20 per cent).  That is Queensland is a net recipient of interstate migration flows. Reasons for interstate migration to Queensland are many and include to be with family, to take up a job opportunity, lower cost of living and housing, and lifestyle considerations such as our wonderful sunshine and beaches.

What is interesting to my mind though is Queensland only attracted 16.4 per cent or 88,270 international migrants of the total 538,820 persons migrating to Australia (well under our theoretical per capita share).  Obviously many of these overseas migrants didn’t get the memo.  Australians who are arguably more informed of the place to be are locating en masse to Queensland yet overseas migrants continue to flow to both Sydney and Melbourne.

It is probably just as well though as SEQ continues to groan under population pressures.  If our State over the past ten years had of attracted the same ratio of overseas migrants as we did interstate migrants then we would have an additional 342,000 persons residing in the Sunshine State. This represents a massive untapped economic opportunity but it also represents a potential disaster for our State’s infrastructure. 

So a good question to overseas migrants may well be ........  where the bloody hell are you and what can we do to keep you there!*

Seriously though interstate migration to Queensland is now well and truly bouncing back after some difficult years for our economy but I am concerned that Queensland appears to be experiencing a declining share of overseas persons migrating to Australia. It is probably time to get on the front foot and start spruiking what we have to offer but also who we need in terms of skill shortages.

*For the record I am pro-immigration believing it to represent a wonderful opportunity to enrich our community as well as increase demand across the economy. 

All figures sourced from ABS Catalogues 3412.0 and 3101.0

Queensland should support the NEG – when perfection and politics are the enemy of good

In true Better a diamond with a flaw than a pebble withoutfashion - Queensland should support the proposed National Energy Guarantee this Friday when COAG's Energy Council meets to consider it.

If you believe the hype - the National Energy Guarantee will deliver lower electricity prices, improve reliability, encourage the right investment, provide certainty, reduce emissions without subsidies, taxes or trading schemes whilst at the same time being truly neutral to solar, wind, coal, gas, batteries or pumped storage.

To quickly provide background - the NEG is essentially made up of two guarantees for energy retailers across the National Electricity Market:

  • A reliability guarantee will be set (by Australian Energy Market Commission and Australian Energy Market Operator) to deliver the level of dispatchable energy needed in each state; and
  • An emissions guarantee will be set to contribute to Australia’s international commitments. The level of the guarantee will be determined by the Commonwealth and enforced by the Australian Energy Regulator (AER).

What I particularly like about the NEG is its simplicity – energy retailers will have to contract in and buy a set level of reliable energy to keep the power on and a set level of low-emissions energy to help the energy sector hit its share of the Paris Agreement emissions reduction of 26-28 per cent by 2030.  The beauty of this policy is that it can be scaled up or down for the government-of-the-day's emissions ambitions and accordingly has a chance of receiving bi-partisan support.

Green groups will naturally argue that the NEG does not go far enough to cut energy sector emissions.  This is what I mean by it will never be perfect so surely something good is better than no policy at all. Representatives of Australia's biggest employers, small businesses, the energy industry and the agricultural sector have rallied behind it and have urged federal, state and territory leaders to put aside politics and ideology and support the implementation of the NEG.  Together these organisations represent businesses that employ five out of six working Australians and contribute more than 80 per cent of economic output in this country. To my mind that's quite a voice and should listened to.

Unfortunately it may be process that ends up being the enemy of good.  If agreed to by the COAG Energy Council, Energy Minister Josh Frydenberg then has to get agreement from the Coalition’s party room.  This is not only problematic in getting the Coalition on the one page but the Palaszczuk Government now has hesitation because the NEG can be tinkered with following COAG agreement  - equating it to a blank piece of paper that the Premier is not prepared to sign off on.  Whilst not entirely correct, the Premier’s comments do have some merit and I would think it not too unreasonable for the Coalition to respect the potential agreement arrived at this Friday. 

But at the same time, this is not grounds for the State Government to play politics itself and baulk at policy that will yield benefit on prices, reliability, certainty and the planet. The NEG is not perfect but it is certainly better than no policy at all or uncompromisingly partisan policy. 

The NEG summary:

  • Retailers must have contracts in place to support a minimum amount of dispatchable energy to meet consumer and system needs.
  • The average emissions level of electricity sold to consumers must meet the electricity sector's share of Australia's international emissions reduction commitments.
  • Australia's current target is to reduce 2005 level emissions by 26 to 28 per cent by 2030.
  • The Energy Security Board estimates typical household bills will fall by an average of $110-$115 per year over the 2020-2030 period.
  • Renewables will make up 36 per cent of national energy market generation within 11 years, up from the current 17 per cent.
  • Without closing any coal-fired power stations, the share of coal-fired power generation will fall to 60 per cent from 75 per cent.


Critical Appraisal of Queensland’s Labour Market

Queensland’s labour market finds itself in a peculiar situation: it has experienced very good employment growth yet our unemployment rate remains stubbornly above six per cent.

Queenslanders should in theory be highly concerned that our State’s unemployment rate remains 0.7 per cent above the national average of 5.4 per cent.  The gap between our unemployment rate and the national average is widening despite the gains made in job creation.

QEAS takes a look at some of the underlying influencers contributing to our stubbornly high and cemented unemployment rate of 6.1 per cent.

Queensland’s labour market has experienced steady growth in 2017-18 with total employment growing in the12 months to June 2018 by 2.6 per cent, the same level of growth that has occurred nationally.  Whilst employment growth has hit its peak for this cycle an additional 62,700 jobs over the past 12 months is something to be very happy about.

The composition of this growth has also been very good with a good split between 39,900 jobs being full-time positions and 22,900 being part-time.   Despite all the hullabaloo only 10 per cent or 6,204 of these 62,700 jobs were courtesy of the State Government increasing the size of the public service (a story for another blog).  It is the Queensland private sector that has done the heavy lifting in this improvement which is again a good thing.

One of best indicators for overall economic growth is the number of hours worked and this has also grown over the 12 months to June 2018 by 5.3 million hours indicating additional demand for labour as domestic economic activity has lifted.  So arguably the State’s labour market performance has been very good. 

Yet there has been a considerable disconnect between this jobs improvement and it benefiting our State’s unemployed persons. Some quicks stats here for context:

  • The number of registered unemployed persons between June 2017 and June 2018 actually increased by 1,800 persons to 161,200 persons.
  • Our unemployment rate between June 2017 and June 2018 only decreased from 6.2 per cent to 6.1 per cent whilst our underemployment rate (the number of persons looking for additional hours of work increased from 9.0 per cent to 9.2 per cent.   

So what is going on? Well the answer to this almost certainly relates to our State’s participation rate and also interstate migration. The participation rate is in itself a great measure of confidence in the labour market and over the 12 months to June 2018 it rose from 65.3 per cent in June 2017 to 65.8 per cent and is now higher than the national rate of 65.6 per cent.

As employment creation has occurred more persons have returned to our State’s labour market looking for work.  These person’s would have previously been out of the labour market either on home duties or in education. For every job being created, we have had a new person re-entering the labour market either taking one of these newly created jobs and in turn denying a job to unemployed person or registering as being unemployed in the expectation that they will find work soon.  In effect there has been no net change.

In addition there is also no question that our State’s unemployed persons are in competition with persons located interstate and overseas.  Population always flows towards employment opportunity and both overseas and interstate migration have surged across the period of Queensland’s labour market improvement.  Chances are some of the 62,700 jobs created have gone to interstate and overseas workers rather than drawing down on our State’s unemployed.

So should we be alarmed that the gap between our unemployment rate and the national average is widening?  The answer is no - in reality we have had solid jobs growth, a participation rate rising and strong population growth courtesy of our labour market improvement.  We can always be doing better and no stone should remain unturned whilst 160,000 plus Queenslanders find themselves out of work. In addition our youth unemployment rate is at 13.2 per cent more than double the State unemployment rate.

However and in summary, the 2017-18 financial year was a good one for Queensland's labour market.

If only there was another word for innovation

Last week the Australian Bureau of Statistics released their latest snapshot of Australian business innovation.

Innovation is a widely used term but not necessarily widely understood particularly by small business.  It is defined as the development or introduction of new or significantly improved goods, services, processes or methods. Innovation can be seen in a variety of forms, from a major breakthrough such as creating and bringing a new product or service to the market, to a series of smaller innovations such as finding better or more efficient ways of working and becoming more profitable.

As innovation is often seen as a continuous process and aspects can be intangible, it can be incredibly difficult to measure however the ABS goes about doing this by asking businesses whether they are engaged in innovation activity. Key points from ABS include:

  • The number of businesses engaging in innovation activity is increasing across Australia;
  • Almost two in five businesses introduced innovation activity into their business in 2016-17;
  • Larger businesses are unsurprisingly more likely to engage in innovation than small business but innovation in small businesses is still widely prevalent despite not being regarded by them as innovation;
  • The main benefits of innovation are in the areas of increased revenue and improved customer service;
  • The main impediments to innovation particularly for small business are lack of additional funds and skilled persons; and
  • Over half of all innovation-active businesses sourced their ideas and information for the development of innovation from within the business or another owned by the same company.

The results confirm that innovation is evident in many small businesses yet when talking to them many do not see themselves as innovative.  Unfortunately but understandably many small businesses roll their eyes when the word innovation is mentioned  – in short it is a term that has been overused and the programs that have been provided by Government have not hit the right audience. If only there was another word for innovation that does not conjure up confusion and also frustration following an innovation agenda across both Commonwealth and State Governments targeted towards start-ups and 'Tier One' innovation to the detriment of existing Queensland small businesses.

A key take away is that innovation needs to be redefined and refocused as more than just 'Tier One' activities such as R&D and applying for / or registering a patent for a new product or technology. Programs need to pivot towards the adoption by small businesses of everyday operational processes or adaptation or progression of process and methodology.  When this occurs small businesses will think considerably more favourably upon the rhetoric surrounding innovation.

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